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The following article was originally published as Viewpoints No. 54 by the Middle East Program at the Woodrow Wilson International Center for Scholars.

Michael Adler

Despite a spiraling crisis in Ukraine and discontent in Israel and Saudi Arabia, the Iranian nuclear talks have hit their stride. A meeting this month in Vienna was the second round in a drive to hammer out a comprehensive agreement to guarantee that Iran will not seek nuclear weapons. Iran and six major powers talked through the nitty-gritty of intractable issues such as the right to enrich. A senior U.S. official described the discussion as “respectful, professional, and intense.” The official said the talks “dove more deeply and at a more detailed level into the substance of key issues more than we have ever previously,” even if both sides made clear that it was too early to expect any breakthroughs.

Over a decade after Iran was discovered to be hiding nuclear work that could lead to a bomb and six months after a diplomatic breakthrough that ended frosty non-communication between long-time adversaries the United States and the Islamic Republic, the fact that there is serious dialogue is already an accomplishment.

But there is a long way to go and not much time. The two sides are aiming for a final agreement by July 2014. The March 18-19 meeting in Vienna followed a first round in Vienna in February. These talks on a final agreement came after an interim accord reached last year that created the framework for negotiations. In a joint plan of action, Iran and the six major powers—the United States, Russia, China, Britain, Germany, and France—agreed that Iran would not expand its nuclear work during the time of the talks and, in return, would get partial relief from sanctions that have slashed its oil sales and crippled its economy. The two sides will meet again in April. The July deadline for reaching a resolution may be extended six months until next January.

The most noteworthy aspect of the March round was that it was not affected by the escalating crisis in Ukraine, where Russia has annexed the Crimean peninsula and threatens to expand its intervention further. Russian Deputy Foreign Minister Sergei Ryabkov, who represented his country in Vienna, said after the talks that Russia might take “retaliatory measures” over Iran if it faced international pressure for its actions in Crimea. Moscow did not want to do this but “the historic importance of what happened in the last weeks and days regarding the restoration of historical justice and reunification of Crimea with Russia is incomparable to what we are dealing with in the Iranian issue,” he told the Russian Interfax news agency.

Russia’s pulling back from unity with its other negotiating partners in the so-called P5+1 could scuttle the talks. The six powers have succeeded in bringing Iran to the negotiating table by presenting a united front, most notably over imposing United Nations sanctions. A reduction of this pressure due to a divide among the six could encourage Iran to hold out on making concessions toward a nuclear deal. Russia could signal its dissent from the P5+1 in a number of ways. For instance, it could help Iran sell more oil or deliver the S-300 missiles that would be effective against air attack and which Iran has bought but Moscow has refrained from actually shipping.

Still, there would be costs for Russia in letting Iran off the hook. Russia is not doing the West a favor in joining the nuclear talks as an active participant. The fact is that Russia, like the United States, wants to stop Iran from getting nuclear weapons. Iran is in Russia’s neighborhood, and Moscow does not want the Islamic fundamentalists it faces in central Asia to have potential access to Iranian nuclear weapons.

Ukraine is not the only potential poison for the talks. Key U.S. allies Israel and Saudi Arabia worry that the United States is so anxious for a deal with Iran that it will let the Islamic Republic retain a nuclear weapons capability, especially by continuing to enrich uranium. Both Israel and Saudi Arabia have said this is unacceptable, but the reality is that Iran is almost certain to be able to enrich after a final deal, even if its nuclear program will be reduced and closely monitored.

Israel has made a lot of noise about this. The Saudi concern is every bit as deep, and this is certain to be a major topic when President Barack Obama visits the Saudi kingdom this month. Saudi Arabia, which had wanted the United States to act militarily against Iran’s nuclear program when tension was high, now fears a nuclear deal could be the first step in a rapprochement between Iran and the United States that would threaten Saudi interests. Riyadh is concerned about Iranian activity against it in the region, in places like Syria, Lebanon, Bahrain, Yemen, and eastern Saudi Arabia, an oil-producing area where Shias live. The Saudis work actively against Iranian influence. The last thing they want to see is Tehran’s ability to project power enhanced by having the bomb.

The question is whether the Iranian nuclear negotiations, already fragile in their chance of success, can be shaken by external factors or whether the United States and Iran are both too committed to reaching a nuclear deal for this to be denied. A deal is, of course, still a long shot. The two sides disagree sharply on all the key issues, and the political aims of the two sides also clash in the talks. European Union foreign policy chief Catherine Ashton and Iranian Foreign Minister Mohammad Javad Zarif said in Vienna that the P5+1 had discussed enrichment, the Arak reactor, civil nuclear cooperation, and sanctions at their meeting. The gaps between the United States and Iran on these matters are deep indeed. Iran wants to enrich; to keep its Arak reactor, which is under construction and would eventually be able to produce plutonium; to not dismantle the some 19,000 centrifuges it has installed; and to be freed from sanctions. The United States wants enrichment to be sharply cut back and for construction to stop on the Arak reactor.

These are diametrically opposed points of view, and they could prove fatal to any agreement. But there are technical fixes, which, as one diplomat said, could be moved around to make the Rubik’s cube of a compromise align. A deal may be struck on enrichment, playing off a reduction in the number of the centrifuges refining the uranium, in return for close surveillance of not just the enrichment sites but the workshops where the centrifuges are made. The Arak reactor could be modified to be a light-water reactor, which is less of a proliferation risk than the currently planned heavy-water reactor. Still, the devil is in the details, which will make or break an accord.

Details can, of course, bend to the will of diplomats who know that a comprehensive agreement is the only alternative to letting Iran get the bomb or having to bomb Iran. President Obama is anxious to avoid new conflict in the Middle East, and Iran needs to get rid of sanctions in order to save its economy. These two points of view give, in some sense, the talks their own dynamic, independent of international developments. Wouldn’t it be ironic if the U.S.-Iranian axis for the talks turned out to be more stable than the world crises spinning around it?

Michael Adler is a public policy scholar at the Woodrow Wilson International Center for Scholars.

What is Iran’s standing in the world in 2013 compared to the beginning of 2012?

Iran was resilient in 2012. It managed to survive increasing diplomatic, economic and military pressures:

· Tehran did not yield to new sanctions, despite the fact that oil and gas export revenues had dropped 45 percent in the last nine months of 2012, according to a parliamentarian and an oil ministry report.

· Iran also refused to comply with U.N. nuclear watchdog. In January 2012, the International Atomic Energy Agency (IAEA) reported that Tehran had begun enriching uranium to 20 percent, a step closer to weapon-grade fuel. Tehran also refused IAEA calls for access to documents, scientists and key sites like the Parchin military testing ground to answer questions about alleged nuclear weapons work.

· Tehran openly signaled to its Arab neighbors and the West that it was strengthening its military capabilities. Iran claimed to have captured a U.S.-made miniature surveillance drone in November 2012, after bringing down another in August 2011. It also carried out wide-ranging military exercises in the Strait of Hormuz at the end of 2012.

· Iran weathered Israeli warning of a possible military strike. By the end of 2012, Israel backed off talk of targeting Iranian nuclear installations. Israeli Prime Minister Benjamin Netanyahu yielded to President Barak Obama’s insistence that diplomacy could still resolve the crisis over Iran’s controversial nuclear program.

· On the diplomatic front, the Islamic Republic made no concessions in three rounds of high-level talks with the United States and five other world powers —the so-called P5+1— including Britain, China, France, Germany and Russia. It also hosted the 16th Non-Aligned Movement summit in August 2012, in turn marshaling international support.

But Iran also suffered serious setbacks on several fronts in 2012:

· The United States imposed new sanctions on Iran. In February, President Obama signed an executive order freezing the property of the Central Bank of Iran and other Iranian financial institutions. Additional penalties on foreign banks conducting financial transactions with Iran’s oil sector were imposed in June. In November, the Senate approved indirect sanctions on foreign financial institutions that did business with Iran’s energy and shipping sectors.

· The European Union imposed new sanctions on Iran’s Central Bank and oil sales. In July, it banned the import, purchase and transport of Iranian crude oil. In October, it prohibited conducting business with Iranian banks and financial institutions unless specifically authorized. The 27-nation group also banned the import, purchase or transport of Iranian natural gas.

· The world’s six major powers remained united during three rounds of talks with Iran in Istanbul, Baghdad and Moscow. They demanded that Iran cease enriching uranium to 20 percent. Despite differences, China and Russia did not break ranks from the so-called P5+1.

What new information about Iran’s nuclear program was revealed in 2012?

Iran actually disclosed some new information about its program. It revealed that it was enriching uranium to 20 percent of the U-235 isotope, up from the 3.5 percent needed to fuel for power reactors. Tehran claimed that higher enriched uranium was for a research reactor making isotopes for medical diagnosis. But 20 percent enriched uranium is also closer to weapons-grade uranium, which is enriched to over 90 percent.

But the international community provided more important data. In November, a U.N. report outlined alleged nuclear weapons-related work by Iran. It named Iranian organizations that had worked on an explosive device for a nuclear weapon before 2003, the year it suspended its weapons program. The experiments were believed to have been conducted at the Parchin military testing ground. Iran has refused to let the IAEA inspect this site.

The IAEA report also showed how Iran may have continued its weaponization efforts after 2003, by dispersing the main organizations doing this work into smaller units and renaming them. The IAEA also found that 644 new centrifuges were installed at Fordow, the mountain facility near the religious city of Qom, and 991 centrifuges at the Natanz nuclear facility between August and November. Iran is poised to radically increase the pace of its uranium production once the centrifuges are fully operational.

What are the expectations for international diplomacy with Iran—either with the world’s major powers or unilaterally with the United States—in 2013?

Iran is under a lot more pressure than in the beginning of 2012, mainly from U.S. and E.U. sanctions cutting into its oil sales and its ability to do business internationally. Last year, the value of Iran’s currency, the rial, plummeted by at least 50 percent, with some unofficial estimates claiming by up to 80 percent. In October, bazaar merchants, an important business class, launched a rare protest over the devaluation.

The U.S. strategy is to tighten financial sanctions to push Iran into meaningful negotiations. For now, however, Iran is widely estimated to have enough foreign reserves to finance its budget and keep the economy from collapsing, despite both domestic and international pressures. And, in the beginning of 2013, neither Israel nor the United States has used language about the military option.

Michael Adler, a public policy scholar at the Woodrow Wilson International Center for Scholars, formerly covered the International Atomic Energy Agency for Agence France-Presse.

Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

Diplomats from Iran and the world’s six major powers—the United States, Britain, China, France, Germany and Russia -- met in Baghdad on May 23 and 24. What did the talks produce?

Nothing concrete. It was their second meeting in a new round of negotiations over concerns Iran is secretly using a civilian nuclear program to develop nuclear weapons. The opening round was held in Istanbul on April 14. The major powers want Iran to suspend uranium enrichment, which makes fuel for peaceful nuclear reactors but can also produce material for the world’s deadliest bomb.

In Baghdad, both sides basically stuck to longstanding positions. The world’s six major powers proposed that Iran stop enriching uranium to 20 percent, a level closer to weapon-grade fuel. They also called on Tehran to ship their stockpile of uranium enriched to this level out of the country.

In turn, Iran demanded that world recognition of its right to enrich uranium for use in its nuclear energy program. It also called for sanctions to be lifted as part of any agreement, although Iranian envoys did not stipulate this as a precondition for talks. Diplomats representing the world’s six major powers countered that they would not postpone tough sanctions due to come into effect in July against Iran's oil industry.

But they did agree to meet again. After the two-day talks, European Union foreign policy chief Lady Catherine Ashton conceded that "Significant differences remain. But she noted that all sides “do agree on the need for further discussion" to expand "common ground." Iran, she also said, "declared its readiness to address the issue of 20 percent enrichment."

What does the outcome indicate about the prospects for diplomatic resolution?

Iran and the world’s six major powers agreed to hold a formal third round in Moscow on June 18-19. "We remain determined to resolve this problem in the near term through negotiations and will continue to make every effort to that end," Ashton said.

After the talks, Iranian negotiator Saeed Jalili indicated a willingness to pursue a negotiated settlement while remaining defiant on what Tehran views as sovereign issues. "What has ended today is the approach of ratcheting up pressure on Iran" and that the "approach of cooperation" would pave the way to progress, Jalili said.

For all the visible differences, however, one diplomat involved in the talks reflected, "We are further along in saying that nuclear is the issue to be discussed and that 20 percent enrichment is part of this."

What happens next?

Before the Moscow meeting, experts from both sides will hold lower level talks on specific sticking points to facilitate more significant progress at the next round of diplomacy.

Michael Adler, a public policy scholar at the Woodrow Wilson International Center for Scholars, formerly covered the International Atomic Energy Agency for Agence France-Presse.

The most concrete result of the meeting in Istanbul on April 14 was a new round of talks scheduled for May 23 in Baghdad. The original goal was to re-start diplomacy between Iran and the world’s six major powers— Britain, China, France, Germany, Russia and the United States, nicknamed the P5 plus 1—because of concerns that Iran is secretly trying to develop a nuclear weapon. Diplomacy had broken down in January 2011 when Iran said at a meeting with the P5 plus 1, also in Istanbul, that it would only negotiate if sanctions against it were lifted and if its right to enrich uranium were accepted without reserve. The success at the new Istanbul talks was that Iran did not impose such preconditions. The two sides discussed Iran's nuclear program but did not try to agree on measures to do something about it.

What does this mean?

It means that the two sides are talking again. This is probably the result of pressure on Iran from sanctions, which now target its ability to sell oil, the lifebood of its economy. These sanctions by both the United States and the European Union are to take effect this summer but they are already being felt as countries such as Turkey and Japan are also cutting back on buying Iranian oil. In Istanbul, Iranian negotiator Saeed Jalili said Iran expected relief from sanctions in return for its cooperation in giving guarantees that it does not seek nuclear weapons.

What happens next in this process?

Before the meeting in Baghdad, experts from the two sides are to work on an agenda of concrete measures to be considered at this new round. Outstanding issues are Iran's enriching uranium, which can be fuel for power reactors but also the raw material for nuclear bombs, to 20 percent, closer to weapon-grade and so worrying to the United States and other nations. The goal is to get Iran to agree to confidence-building measures, such as stopping 20 percent enrichment, and for the P5 plus 1 to figure out how to reward such behavior, perhaps by pledging not to increase sanctions or by lifting some of them.

What are the main differences between the parties?

Iran feels it is doing nothing wrong. It claims it has the right to enrich uranium as part of peaceful nuclear work authorized under the nuclear Non-Proliferation Treaty. Iran says its nuclear program is a legal effort to use the atom for peaceful ends. The United States and its P5 plus 1 partners suspect that Iran is using a civilian atomic program to hide a drive either to just develop the capability to make nuclear weapons or to go ahead and make them. The six world powers insist that Iran obey UN Security Council resolutions calling on it to suspend uranium enrichment, to answer questions about its nuclear work from the UN watchdog International Atomic Energy Agency and to allow for wider inspections of its nuclear facilities by the IAEA.

Michael Adler, a public policy scholar at the Woodrow Wilson International Center for Scholars, formerly covered the International Atomic Energy Agency for Agence France-Presse.

Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

What is new in the latest report by the U.N. nuclear watchdog agency about Iran’s controversial nuclear program?

The report takes the U.N. nuclear watchdog's accounting of Iran's nuclear program to a whole new level. It is the first time the International Atomic Energy Agency (IAEA) has provided so many details as well as a coherent narrative of how Iran has allegedly done work on learning how to make an atomic bomb.

Among key findings are:

·Iran has continued weaponization work since 2003, despite the U.S. intelligence estimate that Tehran stopped such research at that time

·Iran had a secret project to make enriched uranium

·Iran has designs for how to make the type of uranium metal needed for a bomb. It had also done dry runs, not including nuclear material, on how to make this metal

·Iran may have more advanced plans on how to put a bomb together than previously believed

·Iran had foreign help in working on the detonators needed for an implosion-type nuclear device

·Iran did computer simulations to see if it could make an implosion bomb work. It based this on high-explosive tests using tungsten, a non-nuclear material

·Iran has changed the names and places of organizations doing weapons work in order to avoid detection. But many of the staff members remain the same, including the director of Iran's nuclear weaponization effort, Mohsen Fakhrizadah.

Does this report prove that Iran is seeking nuclear weapons or not?

No, in the end it does not prove Iran is seeking a nuclear weapon, even though the IAEA presents a damning case. In its conclusion, the report says only that the agency has "serious concerns regarding possible military dimensions to Iran's nuclear program." It also reports that "the information indicates that Iran has carried out activities relevant to the development of a nuclear explosive device." This falls short of the IAEA concluding that Iran is "very likely" to have a secret program, which is the furthest the agency will go in saying that the evidence is proven and valid.

In addition, the IAEA says it is still waiting for Iran to answer its questions about the information. So the investigation has not ended.

It’s not a document you could take to the president and say “We must attack Iran.” It’s not enough for military action. It’s not enough of an incremental increase.

What does this mean for possible further sanctions on Iran or other international action?

The report should boost U.S. efforts to convince other nations, especially Russia and China, to support stronger sanctions. The mass of data, and above all the way the IAEA puts it together in a clear and comprehensive picture, will be hard to ignore.

But both Russia and China, which are both veto-wielding members of the U.N. Security Council, have consistently worked to tone down sanctions. They will remain a tough sell for Washington.

Does this increase the likelihood that Israel or the U.S. might use a military option against Iran?

Almost certainly not--at least for now. The report fits current U.S. policy, which is designed to pressure Iran and get it to the negotiating table. Washington's goal is to settle the issue with diplomacy, to avoid having to face the choice of bombing Iran or letting Iran get the bomb. Since Iran is not making weapon-grade uranium and apparently not actually assembling a bomb, there is still time for diplomacy. One point: The IAEA report does not include assessments on how far away Iran is from making a nuclear weapon or from adapting one to fit as a warhead on top of its Shahab 3 missile. Estimates about these two steps are crucial to calculate the state of Iran's nuclear weapons capability.

Israel also backs the sanctions approach, although it would like to see much tougher measures, such as moving against Iran's Central Bank. Short of an imminent existential threat, Israel is highly unlikely to attack Iran if the United States opposes a military option.

Michael Adler, a public policy scholar at the Woodrow Wilson International Center for Scholars, formerly covered the International Atomic Energy Agency for Agence France-Presse.

Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org

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The views, findings, and recommendations of this report are those of the authors alone and do not necessarily reflect the views of the United States Institute of Peace or the Woodrow Wilson International Center for Scholars.